SA's largest mobile operator, Vodacom, this morning reported an increase in group revenue of 7%, to R19.5 billion, with service revenue up 5.1%, to R15.6 billion, for the quarter ended 30 June 2015.
South African revenue grew by 5.5% year-on-year, to R15.6 billion, while revenue from international operations was up 14% year-on-year, to R4.1 billion.
The company also reported a surge in group data revenue of 35.2%, to R4.8 billion, representing 30.9% of service revenue.
In addition, group active customers were up 6.5%, to 63.5 million, and active data customers grew 10.8%, to 28 million, during the period under review.
South African service revenue grew 2.8%, to R11.7 billion, driven by strong data revenue growth of 34.8%, the company says. International operations' service revenue increased 12.9%, to R3.9 billion; 25.2% of group service revenue.
Vodacom reports that local equipment revenue grew 13.8%, representing 23.1% (2014: 21.4%) of revenue, as a result of an increase in smart device sales (smartphones, tablets and modems). Smart devices accounted for 58% of equipment sold in SA.
Meanwhile capital expenditure of R2.3 billion was focused on LTE/4G rollout and expanding 3G coverage, Vodacom says.
"During the first quarter of our new financial year we delivered solid growth, which was a continuation of the positive growth momentum we saw in the fourth quarter last year," says Vodacom Group CEO Shameel Joosub.
"We invested another R2.4 billion in the network this quarter as part of the accelerated capital investment programme started towards the end of the 2014 financial year, resulting in wider coverage and faster connection speeds."
Joosub says the increased capacity supported data traffic growth of 45.7% in SA and 140.4% in the company's international operations, which in turn led to group data revenue increasing 35.2%. Vodacom's 3G service covers 96.4% and LTE/4G service covers 40.9% of the population in SA, and the operator increased the number of 3G sites in its international operations by 49.8%.
Smart devices
"Smart devices remain extremely popular, with approximately 12 million active on the network in SA, which is almost three million more than a year ago. The average amount of data used per smartphone in SA increased 24.8%, to 408 MB per month," says Joosub.
"We're nearing completion of our pricing transformation programme in SA, with 80.7% of contract customers migrated to better value integrated packages and prepaid customers buying on average 54.5 million voice bundles per month."
This, says Joosub, has helped reduce the blended average effective price by 14.7%, to 58c per minute, and drove an increase in voice traffic.
He also noted the Competition Commission has made a recommendation to the Competition Tribunal that it approves Vodacom's acquisition of Neotel, subject to certain conditions.
"The matter will now be heard by the Competition Tribunal, with hearings set to take place from 23 November to 11 December 2015."
Joosub says the Independent Communications Authority of SA (ICASA) has also approved the transaction subject to conditions that it has submitted for comment. The transaction will ultimately result in increased investment in communications infrastructure and the accelerated rollout of broadband connectivity in SA, he says.